This study complements existing literature by examining the nexus between energy consumption (EC), CO₂ emissions (CE), and economic growth (GDP; gross domestic product) in 24 African countries using ...a panel autoregressive distributed lag (ARDL) approach. The following findings are established. First, there is a long-run relationship between EC, CE, and GDP. Second, a long-term effect from CE to GDP and EC is apparent, with reciprocal paths. Third, the error correction mechanisms are consistently stable. However, in cases of disequilibrium, only EC can be significantly adjusted to its long-run relationship. Fourth, there is a long-run causality running from GDP and CE to EC. Fifth, we find causality running from either CE or both CE and EC to GDP, and inverse causal paths are observable. Causality from EC to GDP is not strong, which supports the conservative hypothesis. Sixth, the causal direction from EC to GDP remains unobservable in the short term. By contrast, the opposite path is observable. There are also no short-run causalities from GDP, or EC, or EC, and GDP to EC. Policy implications are discussed.
•We analyze cryptocurrency market efficiency during the pre- and post-COVID 19 announcement pandemic.•We analyze cryptocurrency market efficiency during the bubbles and non-bubbles periods.•We ...cluster the different market efficiency time series based on their similarity.•The post-COVID19 period has the highest impact on the cryptocurrency market efficiency.•We find evidence for the mining coins, non-mining coins and token categorizations clusters.
This paper compares the degree of cryptocurrency market efficiency during the pre- and post COVID-19 pandemic with the bubble and non-bubble periods of cryptocurrency markets. Furthermore, it examines and clusters eighteen cryptocurrencies by exploring their market efficiency similarity. Comparing the cryptocurrency bubble periods with the COVID-19 pandemic, the results indicate that this pandemic has the highest impact on cryptocurrency market efficiency. Interestingly, using the dynamic time warping clustering approach, we found evidence on the presence of three clusters that essentially represent mining coins, non-mining coins and token categorizations .
Institutional quality plays an undeniable role in every goal of accelerating economic growth. While the MENA region offers many natural assets that can make investments in renewable energy ...profitable, this region suffers from several institutional quality issues. In this line of thinking, this paper examines the relationship between renewable energy and economic growth in MENA countries taking into account institutional measures. To get a deeper insight into the relationship between this triangle of annual variables spreading from 1986 to 2015, our study considered a broader set of institutional variables, namely, corruption, bureaucracy quality, democracy accountability, law and order, and ethnic tensions. Using panel cointegration tests, we found that renewable energy, economic growth, and any institutional measures, of all considered in this study, are cointegrated. Furthermore, we found a strong causality running from renewable energy and any institutional measure, except law and order, to growth. A reverse path is also observed since there is also a strong causality running from growth to renewable energy when the causal regression includes any institutional measure. Our findings corroborate the fact that establishing an attractive institutional framework in MENA countries could be of ultimate importance in the profitability of renewable energy investments and in accelerating economic growth.
This article investigates the potential of nonlinear causal relationships between world oil prices and stock markets in Middle East and North Africa (MENA) countries during a black swan period that ...is characterized by rarity and devastating impacts. Our study is carried out using the daily data for 11 MENA countries over the period from 2 July 2007 to 27 August 2012. By using the nonlinear and asymmetric causality test of Kyrtsou and Labys (2006), we mainly find that: (i) the oil prices and MENA stock markets interact in a nonlinear manner; (ii) the signs of changes in the causing variables are important for detecting the true causality links between the variables and (iii) the nonlinear causality is more pronounced in the case of the Brent than West Texas Intermediate oil prices.
Over the past years, the economies of the Gulf Cooperation Countries (GCC) countries, which hold a large of the world in oil and gas exports, have suffered from dramatic declines in oil prices. This ...has put pressure on their policymakers to seek relief from their heavy dependence on natural resources and diversify their exports. At the same time, the GCC countries have high electricity consumption due to their severe climatic conditions. This has prompted their policymakers to consider the inevitable shift to environmentally friendly resources for electricity generation. Foreign direct investment, facilitated by the financial systems of these countries, may play an important role in achieving the above objectives. Therefore, the objectives of our paper are to investigate the relationship between foreign direct investment, electricity consumption, and financial development in GCC countries using a novel GMM-Panel VAR approach. Data are observed from 1990 to 2019. We find bidirectional causality between foreign direct investment and financial development and two unidirectional paths: one from electricity consumption to foreign direct investment and from financial development to electricity consumption. In addition, we observe negative and significant responses of financial development to shocks in electricity consumption. Our results can have a double interpretation. First, they provide an overview of the interactions between the variables studied, whose evolution may be prognosticated with the analysis of shocks resulting from the methodology adopted in our paper. This is serviceable given the recurrent turbulence in the international financial markets and the incessant perturbations in the prices of energy commodities, visually examined especially in recent years. Second, our empirical findings are useful for policymakers willing to have earlier diagnoses for policies strengthening renewable energy use in these countries. Our results can be seen on the side of this objective. The quite developed financial system in these countries may play, indeed, an important role in encouraging the FDI installation in the field of renewable energy.
The international community is more than ever before worrying about the unremitting global warming and climate change and the responsibility of extensive energy use for that situation. This article ...contributes to the existing literature by examining whether energy consumption predicts CO
2
emissions during the past 50 years in the five most polluting nations in the world. To do this, we have been using the recently developed predictability test of Westerlund and Narayan (
Journal of Banking and Finance, 36
, 2632–2640,
2012
,
Journal of Financial Econometrics, 13
, 342–375,
2015
). We take thereby into account the problem of endogeneity and persistence in the explanatory variable. Likewise, this test has the advantage of treating the problem of heteroscedasticity. Using several predictive evaluation measures and assuming the historical average as a benchmark, we find that the basic model of the predictability test of Westerlund and Narayan (
2012
,
2015
) surpasses the benchmark model. These findings reveal that primary energy consumption predicts CO
2
emissions in the world and all countries, for different forecast horizons. Further, the in-sample evidence of predictability has been supported by the out-of-sample analysis.
The convergence of air pollutants is a major concern for policymakers since all the countries pursue the goal of allocating the emissions equally internationally in the future. Hence, the examination ...of the existence of convergence is important for the climate change protection of the earth. In this article, greenhouse gas (GHG) emissions convergence among the G7 countries for the period between 1990 and 2011 is examined using the pairwise testing technique proposed by that aims to analyse probabilistic convergence across a large number of cross-sectional units. Next, we proceed with multivariate tests for stability and the existence of unit roots. Finally, the analysis is complemented by the use of the panel stationarity test accounting for structural changes as proposed by Carrion-i-Silvestre et al. (2005) test. Overall, the results do not confirm the hypothesis of convergence for the countries in question, although, more recently, the countries have shown a small decline in their GHG emissions.
This paper investigates the effect of oil rents on agriculture value added in oil producing Middle East and North African (MENA) countries. Annual data from 1970 to 2011, panel cointegration tests by ...Pedroni (1999), long ran panel causality tests by Canning and Pedroni (2008), and two-step System GMM by Blundell and Bond (1998) are used in this study. We find a negative relationship between oil rents and agriculture value added in the long run, with a rather slow rate of short run adjustment of agriculture value added back to equilibrium after a boom in oil rents. These results indicate that an oil sector boom is associated with a contraction in the agriculture sectors of the countries in the panel in the long run. This is probably attributable to a resource movement effect from other economic sectors to the booming oil sector in these countries. This serves as evidence of a Dutch disease effect of an oil sector boom on agriculture in the MENA countries in this study.
•Negative long run reverses causality between oil rents and agriculture value added.•Agriculture value added adjusts slowly back to equilibrium after a boom in oil rents.•A boom in oil rents is associated with a contraction of the agriculture sector.•This serves as evidence of a Dutch disease effect of an oil sector boom on agriculture.
Knowing the real causal links between energy consumption and national income is crucial for policy decision making. In this article, we address this issue for the G7 countries by using two nonlinear ...causality tests in the sense of Hiemstra and Jones (1994), and Kyrtsou and Labys (2006). Our results reveal some new, but mixed results. Hiemstra–Jones test indicates unidirectional causality running from energy consumption to GDP for the United Kingdom, while a bidirectional causality between energy consumption and GDP is found for Canada, France, Japan and United States. On the other hand, Kyrtsou–Labys test shows that a unidirectional causality runs from energy consumption to GDP for France and the United States, and from GDP to energy consumption for Germany. Overall, our findings suggest that policy implications of the energy-GDP links should be interpreted with caution, given the test-dependent and country-specific results.
•We provide further evidence on the energy–growth nexus for the G7 countries.•Two powerful nonlinear causality tests are used to gage the causal links.•Empirical results appear to be very country-specific and sometimes mixed.•The directions of changes matter for the energy–growth causal interactions.
This article studies the interplay of fiscal policy and asset price returns of the United States in a time-varying parameter vector autoregressive (VAR) model. Using annual data from 1890 to 2013, we ...study the effects of dynamic shocks to both fiscal policy on asset returns and asset returns on fiscal policy. Distinguishing between low-volatility (bull market) and high-volatility (bear market) regimes together with a time-varying parameter VAR model enables us to isolate the different sizes and signs of responses to shocks during different time periods. The results indicate that increases in the primary surplus-to-gross-domestic-product ratio decrease house returns over the entire sample and at each impulse horizon. Unlike the house return responses, stock returns only decrease in the first year after the fiscal shock but then increase for the following eight years. Furthermore, the findings show that asset return movements affect fiscal policy, whereby fiscal policy responds more to equity returns than to house returns. The response of fiscal policy to asset returns proves relatively stable and constant over time while controlling for various asset return regimes. Asset returns respond uniformly to fiscal policy shocks since the 1900s.
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